The document discusses how global trade trends have transformed logistics processes into comprehensive supply chain management. It provides examples of how various logistics market players like shippers, shipping companies, ports, and logistics service providers have evolved their roles to address challenges and pursue opportunities in the changing global trade landscape. The examples illustrate how players are increasingly offering integrated services across the logistics chain and expanding across the value chain.

2. Trade 1975
49%
17%
13%
1

3. Trade 2005
40%
16%
26%
2

4. Shrinking of the global market place has mounted
pressure on logistics processes…..
Global shift in trade and manufacturing
 De-industrialization in North America and Europe and re-
industrialization in Asia-Pacific (China, India etc.) ; not only for
low cost industries but high technology products as well
 Companies going global are faced with challenges with respect to
high transportation and inventory cost and also higher cycle
times
 On top of it, customers are demanding lower prices, customized
delivery and faster response cycle
3

5. Global Trends
Impact on Supply Chain
 Globalisation is forcing the pace of growth in the transportation sector
‒ Demand at times outstripping supply
‒ New players, new ideas, innovation
 Supply chains shifting as companies relocate production
‒ Exporting finished goods
‒ Importing raw materials
‒ Intra - asian trading, new markets and components
 Outsourcing of non-core competencies are restructuring
transportation
 Consolidation is providing scale and leading to move from domain
management to industrial management
 Information and data are becoming all pervasive
4

6. Multiple players with varied roles operate in the logistics
chain, resulting in a need for seamless interaction for
efficient movement of goods
Interactions between maritime trade related players
Major
actors
Agents
Shippers Terminal Operating
Shipping Companies Hinterland
Owners Companies (handling and Transport
storage) Companies
Forwarders
Other Service
providers Banks Customs
Insurance brokers
Legend Relations based on financial flows : from supplier to customer
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7. Global trends has resulted in logistics processes being
transformed into a comprehensive supply chain
management (SCM)
Key changes in logistics processes over the years
 New information and communication technologies driving the SCM
framework
 Minimal inventory across the supply chain (integrated chain)
 Global manufacturing expansion leveraged on best practices of
logistics (Dell is a case in point, it is known as a supply chain
company rather than a IT company)
 Modular production concept driven by contract manufacturing
(vertical disintegration and horizontal integration across value
chains). This helps to be across products / services and enhance
revenue
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8. Shippers are transforming their international logistics
operations, addressing four key areas
Best Practices by Shippers
 Global inventory control
 Transportation spend management
 Import/export process management
 International logistics outsourcing
Shippers are primarily trying to
improve service to customers
through international logistics
improvement and also by investing
less capital
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9. Logistics providers are focusing on three key issues in
their transformation initiatives
Key building blocks
 Visibility (by deploying IT, management systems.
 Trade compliance (global regulatory and business regulations
need to be monitored)
 Transportation contract management (managing alliance
relationships)
Leading logistics providers
are actively creating better
ways to leverage the skills
(and technology) of their
partners
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10. Evolution in supply chain models have resulted in
logistics market players re-thinking their role….1
Key changes in logistics processes over the years
 Emphasis of Shippers on,
‒ greater process automation
‒ improved technologies and
‒ increased reliance on logistics partners
 Shipping companies have displayed flexibility to discover ways to,
‒ synchronize activities with client need
‒ transparency in process
‒ better co-ordination / control with partners (terminal operators,
brokers, etc.)
9

11. Evolution in supply chain models have resulted in
logistics market players re-thinking their role….2
In-land and ocean logistics chain evolution
 In-land distribution has become an important dimension in global
logistics
 Information technology enabled services such as e-commerce,
communications and automation have facilitated global expansion
plans of integrated players
 3PL and 4PL players have emerged - Integrated freight transport,
warehousing, physical distribution solutions
 Major international shipping companies have themselves now started
integrating their services into a broader spectrum of door-to-door
delivery systems, incorporating rail-road haulage movements of cargo,
thereby substantially supplementing their ocean freight income
10

12. Evolution in supply chain models have resulted in
logistics market players re-thinking their role….3
In-land and ocean logistics chain evolution
 Functional role of ports across the value chain has evolved driven by
logistics integration need and freight distribution
 Worldwide trend in port development is now veering towards
terminalisation of ports with focus towards freight specialization. e.g.
LNG terminals, Container terminals etc
 Separation of Port Authority And Port Operator
 Increasing customer pressures towards logistics rationalization of
cargo movement is leading to new ports being developed with
consequent shift in movement of cargo
 Growing clout of port users: Freight service providers have become a
significant part of the value chain
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13. Case Examples
 Let us look at few cases which depict how every market player’s
role in the logistics chain has evolved in last couple of decades
 Integration across value chain had these benefits,
‒ Increase scope for touch-points with customer and hence
revenue streams
‒ Control over the maximum part of supply chain process to
manage customer expectation
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14. A port in U.K. is aggressively marketing its services to not only
shipping agents, liners but also to potential shippers in India
 A leading port called XFL in United Kingdom was eager to
Background increase its container traffic from India by taking a share from its
competition within U.K.
 The end to end logistics cost from India to the key destinations in U.K. (which is
Midlands) such as Manchester, Birmingham via competing port is significantly
higher than that via XFL. The savings are in the range of 20% to 40% of the logistics
cost
 Lack of direct service from an Indian port to XFL was the key reason for poor
Key developments
container traffic to the port from India
 Hence XFL took the following initiatives with an intention to attract Indian exporters,
importers in UK and Shipping lines to their port;
‒ Identified Indian exporters in India and put forth a business case to them
justifying attractiveness of XFL over other ports in UK
‒ Marketed XFL port to number of shipping liners
‒ Met importers in U.K. in order to influence them to opt for XFL and there by
save significantly costs
‒ Nominated a shipping agent to market the port’s attractiveness to Indian
exporters on an ongoing basis
‒ Facilitated inland logistics in the U.K. from port to end consumer locations
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15. Shipping companies are offering integrated services
across the logistics chain
 A leading shipping company amongst the top 10 container liners
Background
in the world
 Global logistics and supply chain dynamics demanded that a shipping
company have control over greater part of the supply chain in order to
manage customer needs, optimize overall cost and also expand revenue
streams
Key developments
 Shipping companies have more to gain by undertaking logistics integration
of their cargo operations than just handling oceanic leg of cargo haulage
 This shipping line expanded started investing in terminal operations and
management then entering in the in-land transportation arena and also into
3PL services such as warehousing , last mile distribution
 Today, many shipping liners have evolved into end to end integrated
logistics providers
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16. Logistics service providers are expanding across the value
chain in order to provide an integrated solution to the end-
customer
 TM International Logistics Ltd a logistics service provider
with a vision of being the most preferred and competitive
Background
end-to-end customer oriented logistics solutions service
provider
 Offers logistics services pertaining to port and terminal handling, maritime
shipping, ship agency, custom clearance and freight forwarding
Key developments
 Ship operating business involving diverse dry break bulk and bulk cargoes
 Port operations activity at Ports of Haldia and Paradip at east coast of India
backed by fully dedicated custom clearance and ship agency services at
both ports
 Runs a clean dry cargo terminal at berth # 12 at Haldia which is equipped
with modern handling facilities including heavy equipments, shore cranes,
vast large open storage area as well as covered warehousing facility
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17. A port state logistics authority in US changed its area of focus
from the waterfront area to every other sector of logistics to
gear up for a major growth surge
 Ports in Georgia, US expected growth surge in its container
Background
traffic in the short-term (2.3 mn TEUs to 4.4 mn TEUs in 8 years)
 This growth in port traffic would impact every other sector of logistics
 It was estimated that daily round truck trips to the container terminal in Savannah
would rise from 3500 to about 5000 plus (this increased demand would mean a
shortage of licensed truck drivers)
Key developments
 In addition to trucking needs, road, rail and support systems would need to be
augmented to manage the growth surge
 Each logistics sector uses new ideas, technology and funding to stay ahead of the
curve, an integrated platform to discuss inter-connected growth and industry issues,
solve problems and share technology solutions across board was created
 Centre for innovation in logistics became the platform to address logistics issues,
leveraging strengths to create new jobs and investment etc.
 Hence objective was not only to enhance the competitiveness of the logistics
industry in Georgia but also boost economic development of the state
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18. Logistics integration is an imperative for growth, however
there exist a lot of barriers which need to overcome in the
journey
Conclusion
 Legal
 Institutional
 Custom
 Physical
 Technical
Ways and means to
overcome these barriers
have to be evolved
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19. Every maritime logistics player needs to brace himself for the
dynamic changes in global trade and its impact on maritime
logistics
Conclusion
 With global trade supply chains set to further expand, the shipping industry is
bound to go through a major re-definition as a part of a larger maritime
logistics web
 Logistics players need to constantly evaluate their position in the bigger game
plan- both externally and internally
 Be in tune with the end-customer needs, anticipating moves from players
across the value chain
(a) Either align with someone who is making a move or
(b) initiate change to be present across more elements of the value
chain, to be of consequence
 internally, leverage technology to your advantage to have better visibility,
with sound systems comply to trade needs and better relations with
alliances
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